Cartrack aims to be debt-free in 18 months
The supplier of fleet management and stolen-vehicle recovery services has cut dividends to repay debt and seek growth
Cartrack, the listed supplier of fleet-management and stolen-vehicle-recovery services, has reduced dividend payments in order to settle its debt and to pursue growth opportunities, says CEO Zak Calisto. The company said on Tuesday it has changed its dividend policy, which had previously targeted a cover ratio of two to four times headline earnings per share (Heps) to a cover a ratio of two to six times Heps in the 2020 financial year. With a low dividend cover ratio, a company normally pays out a large proportion of its earnings as dividends, while a high dividend cover ratio implies that the company retains most of the earnings after paying out dividends.
Calisto said the company has prioritised paying off its R190m debt in about 18 months. With a debt-free balance sheet, the group will pursue growth opportunities, he said.Calisto said paying high dividends is not its priority, in light of the numerous growth prospects in an under penetrated market.“We do not want to be...